Research says that 50% of residential and commercial energy use could be cut down. Twenty four states in an initiative have implemented energy efficiency resource standards which mandate reduction in energy usage by at least 2.5%
Definition / Scope
- The answer to what is Energy Efficiency? – It is a way of managing and restraining the growth in energy consumption leading to rise in profits (and decline in losses) while proving to be beneficial for the environment as well. A device is considered to be energy efficient if it provides more services for the equivalent input, or uncompromisable services for lesser energy input.
- Four broad sectors have been chosen for classifying the major areas of energy consumption: Residential, Commercial, Industrial and Transportation.
- The Energy usage of Residential and Transportation sectors which comprise of almost the half of total U.S. energy consumption is majorly controlled by individual consumers. An example can be cited considering the consumption in the year 2014: Residential and Industrial consumption – 48,761 Trillion Btu; Total Energy Consumption – 98,462 Trillion Btu, i.e. total energy consumption is double the sum of residential and industrial consumption.
- Establishing the need of energy efficiency in U.S.A : Considering the sources used for electricity production, the percentage shares are
- Coal – 39%
- Natural Gas – 27%
- Nuclear – 19%
- Hydropower – 6%
- Other Renewables – 7% (Biomass – 1.7%, Geothermal – 0.4%, Solar – 0.4%, Wind – 4.4%)
- Petroleum – 1%
- Other Gases < 1%
- The yearly transmission and distribution losses are about 6%
- The benefits of energy efficiency can be summarized as follows: reduction in emission of greenhouse gases and other pollutants, reduction in usage of water, decrease in costs and drop in losses, facilitates in lowering baseload and peak demand, helps in risk management by providing protection against fluctuating fuel price.
The United States of America scores to be the second largest consumer of energy in the world. Pertaining to the above fact, it also necessitates for the States to pay special attention towards conservation of energy.
For the year 2011, the value of net fossil fuel import was 286.35 Billion Dollars while, the value of total fuel import was 399.43 Billion Dollars, which indicates a significant amount. United States Department of Energy was brought into existence in Aug 1977 to govern the energy conservation efforts of U.S.
The cities which have been marked the most energy efficient cities by ‘American Council for an Energy-Efficient Economy’ as of May 20th,2015 are Boston, New York City, Washington, San Francisco, and Seattle. While there are others to follow, these are the five which marks the field of energy conservation in the United States of America.
- Research says that 50% of residential and commercial energy use could be cut down. Twenty four states in an initiative have implemented energy efficiency resource standards which mandate reduction in energy usage by at least 2.5%
- Several policies have been adopted to conserve energy. Privately owned buildings or commercial buildings have been directed to label their buildings for judging the level of energy conservation. These parameters are to be disclosed during real estate transactions or any such kind of dealings. Several policies which focus on the utilities has also been adopted such as implementing best practices, integrating efficiency into energy planning, removal of utility financial disincentives, designing rates to motivate investment from customers. Another widely accepted and implemented policy is proper purchase of equipment, adhering only to energy efficient lighting sources.
- Various initiatives and projects as mentioned below have also been implemented by the Office of Energy Efficiency & Renewable Energy
- State and Local Energy Efficiency Action Network (SEE Action)
- Energy Education and Workforce Development
- Clean Energy Manufacturing Initiative
- Hawaii Clean Energy Initiative
- International Partnerships and Projects
- EERE Small Business Innovation Research
- Energy Transition Initiative
- Uniform Methods Project
- Cities Leading Through Energy Analysis and Planning (Cities-LEAP)
- National Laboratory Impact Initiative
- Apart from the ones mentioned above there are certain others which have withstood the test of time, since the late 1980’s and have a proven record of substantial energy savings. They have been confirmed in utilities, regulated and unregulated markets, public sector and various other industries. The ENERGY STAR program is one such program which spans through the following areas
- Commercial Building Design
- ENERGY STAR for Governments
- ENERGY STAR for Industry
- ENERGY STAR Products
- ENERGY STAR Qualified New Homes
- Home Performance with ENERGY STAR
There are certain other tools which have been discussed later.
- Projections indicate escalation in renewable energy and energy efficiency market, increase in jobs in the energy conservation segment, decline in carbon emissions and U.S. approaching a balance in the trade industry of fuels.
- The major risk factor in Energy efficiency programs is funding or financing. Certain technologies are very efficient in terms of saving energy but are not so in terms of budget.
- The technologies and strategies implemented might not work as expected due to environmental and other external factors.
- The projects might not have a rational and feasible approach and thus eventually fail.
- Inability to market competent projects effectively.
Top Market Opportunities
- Energy efficient methods are generally the cheapest and easiest to implement. Research says generation cost can be triple of the amount spent to use efficiency programs.
- The state programs devised if implemented can give savings as much as $5 USD for every dollar invested, thus, increasing the attraction for consumers towards the schemes
Market attractiveness and opportunities can be majorly endorsed by the funding and financing schemes by the government. The current lucrative schemes and the energy departments are:
- The Advanced Research Projects Agency-Energy (schemes offered like IDEAS, GRID DATA etc.)
- [[Building With Brains + Buildings With Brains = Sustainable Future|Office]] of Energy Efficiency and Renewable Energy (Sunshot Prize: Race to 7-Day Solar, Assisting federal facilities with energy conservation technologies – AFFECT etc.)
- Grants.gov (It is a centralized site for grant seekers to avail the best of funding opportunities available)
- FedConnect, FedBiz Opps, Statrtup America are few such other funding sites for vendors and energy service providers
- A specific small business centralized scheme has also been designed for providing encouragement to small industries only – Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs
- The 1973 oil crisis in U.S.A shook the wits of the government officials. The Department of Energy Organization Act of 1977 was brought into effect by the then President Jimmy Carter. A new concept emerged to help people cope with the soaring price of energy – ‘energy conservation’. Since then it has been integrated to the utility system of the states. The spread of energy efficiency programs across the States worked fair except in a certain period during the 1990s, after which the market recovered again.
- U.S.A is one of the frontrunners in the emergence of ESCOs (Energy Service Companies). In 1980’s U.S. saw its first ESCO.
- The energy sources imported in U.S.A include Natural Gas and Crude Oil. Exports include coal and petroleum products. Analysis of the energy contents shows that the United States is an exporter of 12.2 quadrillion Btu (British thermal units) and importer of 23.3 quadrillion Btu. Projections in EIA show that there is a possibility of the exports and imports getting balanced in the coming years
- Coal the major source of electricity production in U.S.A is imported mostly from Colombia (8.3 million short tons imported in 2014), whereas U.S.A’s coal is mostly exported to the Netherlands (12.5 million short tons exported in 2014). Few of the other major suppliers of coal are Canada, Indonesia, and Venezuela. Few other major export destinations of coal are Brazil, Italy, Mexico, UK, Turkey etc.
- A decline in import of Natural Gas (the second most consumed source for electricity production) was marked from 2007 which continues till date. Year 2014 showed a decline of 9% in natural gas import. The decrease in import is mostly the result of increase in domestic production. Both the import and export of natural gas is done majorly with Canada and Mexico.
- Regulations concerning Energy Efficiency Standards:
- U.S.A has its own Energy Policy which gives a broad insight of the strategies adopted.
- U.S.A recognizes National Action Plan for Energy Efficiency and implies its regulations accordingly.
- The U.S. Department of Energy has been directed by law to establish mandatory energy efficiency requirements for new federal residential and commercial buildings apart from already manufactured homes.
- The DOE is also required to revise the ASHRAE standards and publish the same. Public views are also taken into consideration.
- The Federal Energy Management Program analyzes the energy management mandates to facilitate notices and rules for the proper working of the related agencies.
- Study says that there shall be modest growth in demand of energy and its sources which shall gradually lessen the dependence of the States on imports
- Crude oil and natural gas production shall increase. After 2020 and 2017 U.S. shall be a net exporter of crude oil and natural gas respectively
- Energy consumption shall grow at a modest rate; however, the transportation sector shall witness a decrease in consumption comparatively to other sectors. Adoption of energy efficiency polices shall be on a rise and resultantly relative energy consumption shall decline
- Rise in price of long-term natural gas, new coal and nuclear generation capacity shall favor generation from renewable sources. Rise in renewable market is predicted
- Generation, transmission and distribution sectors shall witness a growth in expenditure which shall affect the average retail price of power. Power cost may increase by 18% within the period of 2013 to 2040
- Lower emission of carbon dioxide and other greenhouse gases due to shift towards renewable sources is likely till 2040
- The ESCO (Energy Service Company) market is supposed to grow from $6.3 billion USD in 2015 to $11.5 billion USD in 2024
- The list of DOE qualified ESCOs are : http://energy.gov/eere/downloads/department-energy-qualified-list-energy-service-companies
- There are one hundred and twenty DOE qualified ESCOs in U.S.A at present.
- The revenue of United States ESCO industry grew at the rate of 9% annually during 2009-11, which was a period of severe economic recession
- In future the wholesale markets shall be a major source of market opportunity for the U.S. ESCOs
- On-bill repayment plan and the Property assessed clean energy program may provide to be a new market
- Study reveals that most of the ESCO revenue generate from public and institutional sectors (about 84% of total revenue)
- U.S.A has been able to save about $370 billion USD in lower utility bills till 2012 by using energy efficient methods. As estimated approx. $570 billion USD can still be saved by 2020.
- It is the cheapest and most efficient way to increase profit (and minimize losses) while reducing the cost and toil of generating more power. Reduction in more power generation results in lesser emission of greenhouse gases, carbon emissions and other pollutants. Hence, it is highly recommended and adopted widely.
- The energy efficient proposals are tested and proven. For example the Cambridge and Winchester projects. Winchester was able to save $300,000 annually, while in Cambridge the energy saved in three months from thirty-six municipal buildings was equivalent to the power required for fourteen homes or five Cambridge fire stations for an entire year
- The U.S. ESCO Industry: Recent Trends, Current Size and Remaining Market Potential